Monday Message Board

Back again with another Monday Message Board.

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

50 thoughts on “Monday Message Board

  1. Any Neo-Solzhenitsyn’s?

    JQ tweeted; “Coming across negative references to “neoliberalism”, and wondering: has anyone come up with a solution to the problem that almost any term describing an ideology ends up as a general-purpose pejorative or else buzzword. Counterexamples?”

    Neoliberal / capital and any ism…
    No contest. Rebrand socialism without ‘social’ and without ‘ism’. 
    [2 generations to change name if rebrand starts now]

    Capitalism nor neoliberalism doesn’t, imo, have to compete with:
    …”the intellec­tual as the Stainless Steel Socialist glistening against the bone heap of capitalism in its final, brutal, fascist phase. There was a bone heap, all right, and it was grisly beyond belief, but socialism, had created it.”**

    **”The Samizdat Remains the Same
    BY ED DRISCOLL FEB 15, 2011

    “35 years ago, propping up the Soviet Union was par for the course in academia, as Tom Wolfe spotlighted in this passage from his article, “The Intelligent Co-Ed’s Guide to America,” published in 1976: [read full quote – scathing]

    …” But for his [Solzhenitsyn’s] insistence that the isms themselves led to the death camps — for this he was not likely to be forgiven soon. And in fact the campaign of antisepsis began soon after he was expelled from the Soviet Union in 1974. (“He suffered too much — he’s crazy.” “He’s a Christian zealot with a Christ complex.” “He’s an agrarian reaction­ary.” “He’s an egotist and a publicity junkie.”)

    “Solzhenitsyn’s tour of the United States in 1975 was like an enormous funeral procession that no one wanted to see. The White House wanted no part of him. The New York Times sought to bury his two major’ speeches, and only the moral pressure of a lone Times writer, Hilton, Kramer, brought them any appreciable coverage at all. The major tele­vision networks declined to run the Solzhenitsyn interview that created such a stir in England earlier this year (it ran on some of the educa­tional channels).

    “And the literary world in general ignored him completely. In the huge unseen coffin that Solzhenitsyn towed behind him were not only the souls of the zeks who died in the Archipelago. No, the heartless bastard had also chucked in one of the last great visions: the intellec­tual as the Stainless Steel Socialist glistening against the bone heap of capitalism in its final, brutal, fascist phase. There was a bone heap, all right, and it was grisly beyond belief, but socialism, had created it.”…

    Test for “the bone heap of capitalism in its final, brutal, fascist phase”…

    Tories. Good Firday image w “Conservatives” logo:
    twitter com/nadhimzahawi/status/1377914792170684416

    “Religion has been appropriated by the Tories.
    “Fourteen out of fourteen.
    [Link in article below ]

    The 14…
    “Fourteen out of fourteen as the government completes its fascist scorecard

    “On 20 March I wrote this on this blog:
    “In 2003 historian Laurence W. Britt suggested that there were 14 characteristics to fascist regimes. They were:
    ● Powerful and continuing nationalism
    ● Disdain for human rights
    ● Identification of enemies as a unifying cause
    ● Supremacy of the military
    ● Rampant sexism
    ● Controlled mass media
    ● Obsession with national security
    ● Religion and government intertwined
    ● Corporate power protected
    ● Labour power suppressed
    ● Disdain for intellectuals & the arts
    ● Obsession with crime & punishment
    ● Rampant cronyism & corruption
    ● Fraudulent elections

    And Australian Liberal party logos?

    “AdRorts: Comrade Hunt deploys Communist propaganda tactics in government advertising

    “Shadow Minister for Public Accountability,  Kelvin Thompson’s introductory remarks for the Government Advertising (Prohibiting use of taxpayers’ money on party political advertising) Bill 2005….

    “I suspect Orwell would see, as he did back in the 1930s, the rich and outrageous irony of governments using the resources of the people to manipulate them and to keep them acquiescent, passive and apathetic.”

    “Unfortunately Thompson’s bill never got up. John Howard’s majority saw to that. It has now become widespread practice for Coalition ministers to spend public money advertising their political parties.

    “The AEC refused Michael West Media’s request for a further interview with their Commissioner and Deputy Commissioner”

    Kelvin Thompson::
    ” On 9 March 2007, Kevin Rudd informed the media[4] that his office had received an anonymous tip-off that back in 2000[5] (Kelvin) Thomson had provided Melbourne ganglandfigure Tony Mokbel with a personal reference, saying he “understood” Mokbel had been married for the past eight years and also understood that Mokbel had been “a responsible, caring husband and father”

    And on K Thompson’s wiki page shows what minisers are supposed to do in a controversy;
    ” … allegations surrounding his past meetings with disgraced former Western Australian premier Brian Burke”;[11] and that Thomson “had no choice but to resign, especially since [Prime Minister] John Howard raised the bar a week ago by sacking Ian Campbell for doing nothing more than the meeting, in his then-capacity as heritage minister, a delegation which included Burke.”…

  2. The world’s leading energy analysts go the full Greta

    “A 100% renewable electricity supply is possible by 2030, and with substantial political will around the world, 100% renewable energy is also technically and economically feasible across all other sectors by 2035.”

    The findings won’t be news to JQ’s readers here, or indeed mine if any ( ), but generally élite opinion has not got the free lunch message. Maybe this time? The group’s media person has chosen photos of the gurus all smiling: I think this is the right choice for a message of hope.

    The science of the transition hasn’t changed much since 2015, nor has the technology. Some useful ideas have moved from “maybes” to “sure things”: V2G, P2G, DRI steel, floating wind, grid batteries, agrivoltaics, smart homes. Mostly it’s just been good old economies of scale making renewables and EVs ever cheaper. Solar pv has just been sold for 1c per kwh in Saudi Arabia. The economic proposition on the transition has gone from “costs about the same in cash terms, massive saving if you throw in social costs” to “large net saving in cash terms, even more massive with social costs”.

    The problem as always is that in real life there is no such thing as a Pareto improvement making everybody better off. You can’t fully compensate for loss of status and power. However, generous compensation and retraining for some loser groups like mineworkers is easily affordable (see Spain). The mine and coal plant owners deserve nothing, but in practice will have to be bought off, as in Germany. In the aftermath of a pandemic recession, the substantial frontloading of investment in smart grids etc is a plus not a negative.

  3. The China coal contradiction

    Xi Jinping likes to project a strongman image, but on coal it’s dithering all the way.

    Some numbers for 2020:
    New coal plants permitted 36.9 GW
    Electricity demand growth 3.1%, +224 Gwh
    New wind + solar: 120 GW, CF say 20%, + 210 Gwh in a full year
    New coal plants connected 36.4 GW, target CF say 60%, +191 Gwh in a full year
    Curtailment of renewables is now insignificant (<5%). They enjoy despatch priority on the Chinese grid.

    Inference: the many new coal plants are fighting for scraps from a slowly growing pie. If they got +20 Gwh they did well; which could have been met by just 4 GW of new plants. The other 33 GW was just wasted investment, driving down capacity factors for he whole coal fleet and bringing forward the closure of slightly less efficient but otherwise perfectly good 25-year-old power stations. The continuing boom will just inflate the bubble and worsen the impending crash.

    To be fair, Xi has slammed on the brakes and new coal plant permits have slowed to a trickle – but old ones are not being revoked. Too late to prevent a monster financial and climate headache. Much more here:
    I’ve left out the many links to data sources. You can easily check on Google.

  4. JQ on twitter:
    “I tried “market liberalism” as an alternative to “neoliberalism”, but it didn’t get picked up, and the “neo” part is actually important.”

    Try –  neorentiers. Captures sentiment of new capital ‘controls’ and rentier behaviour. Nice. ymmv.

    Neorentiers tagline:
    “triggering liquidity and haircut spirals” (from paper below).

    …”imposed by credit expansion turned out to be weak and reliant on repeated loosening of monetary conditions in order to support asset prices, the famous ‘Greenspan put’, after Chairman of the Federal Reserve, Alan Greenspan. Second, neorentiers’ increasing reliance on daily mark-to-market across repo and derivatives contracts introduced new pro-cyclical financial mechanisms, reinforcing movements in asset prices, market liquidity (see Brunnermeier and Pedersen 2008) and leverage (Adrian and Shin 2009) and thus credit conditions.

    “Rather than stronger financial regulation, the technocratic response to LTCM’s collapse was greater market discipline via collateral. Collateral would become a ‘disciplinary’ thwarting mechanism: if neorentiers were to value collateral to market on a daily basis and generally improve their risk management regimes (see Ruben et al 1999), the prospect of falling collateral prices and the attending funding pressures for their collateral-based liabilities would keep leverage in check.

    “To encourage the shift to collateral, central banks adopted neorentier practices of collateral-based liquidity provision. By 2000, central banks in high-income countries replaced outright interventions in government bond markets, whether for monetary policy implementation or lender of last resort support, with repo lending (Gabor and Ban 2016). Central banks also promoted government bonds as safe assets for collateral-based finance (CGFS, 1999), downplaying the possibility that relatively low volumes of public debt would generate shadow banking innovation to increase the supply of ‘safe assets’ via securitisation (Coeuré, 2016, Gabor, 2016; Gabor and Vestergaard, 2018).

    “The discipline of collateral proved illusionary. After Lehman’s collapse, neorentiers turned away from private collateral (Gorton and Metrick, 2009), triggering liquidity and haircut spirals on previously ‘safe’ assets (Brunnermeier …”

    “Institutional supercycles: an evolutionary macro-finance approach
    July 2020

    We build upon the Minskyan concepts of ‘thwarting mechanisms’ and ‘supercycles’ to develop a framework for the analysis of the dynamic evolutionary interactions between macrofinancial, institutional and political processes. Thwarting mechanisms are institutional structures that aim to stabilise the macrofinancial system. The effectiveness of such structures changes over time, creating a secular cyclical pattern in capitalism: the supercycle. We develop a macrofinancial stability index and identify two supercycles in the postwar period, which we label the industrial and financial globalisation supercycle respectively. For each, we apply a four-phase classification system, based on the effectiveness of institutions, customs and political structures for stabilising the macrofinancial system. The supercycles framework can be used to explain and anticipate macroeconomic, financial and thus political developments, and moves beyond conventional approaches in which such developments are treated as exogenous shocks.”

  5. Bill Mitchell (Modern Monetary Theory) has an interesting post “Latest IMF data helps us see how political choices impact on health and economic outcomes”.

    Highlights of his Post

    “It is both health and economy not either. One of the themes I observe on social media continues to focus on the claims that lockdowns do not work.

    The proponents of these ideas should come to Australia or New Zealand where our state governments (Australia) and national government (NZ) adopted successful elimination strategies using lockdowns as a powerful weapon. They are painful and costly. But they work and they get us back to more usual life more quickly.

    The reality is most governments did not take adopt the elimination strategy and so they are caught in a sequence of virus waves, temporary lockdowns, eased to soon, and so it goes. Of course lockdowns do not work if you don’t do them within an elimination strategy and shut borders tight.

    And the other furphy that it is either economy or elimination has also been exposed by the evidence. The recent report from the Paris-based Institut Économique Molinari (published April 2021) – The Zero Covid strategy protects people and economies more effectively – authored by Cécile Philippe and Nicolas Marques provides compelling evidence to support that contention.”

    Bill Mitchell gives links to this evidence and then summarises it:

    Their research found that:

    1. “Countries pursuing a Zero Covid strategy experienced a less severe economic decline in the second quarter of 2020 than the countries that allowed the virus to spread to such an extent that their health systems were saturated (-4.5% versus -11.7%).”

    2. “The Zero Covid strategy is showing lasting positive effects: In the fourth quarter of 2020, the countries applying this strategy had almost returned to normal economic activity. Their GDP was down only slightly (-1.2%) compared to 2019. Meanwhile, the decline in GDP was greater (-3.3%) in countries that had not eradicated the virus.”

    3. “Mobility data from Google show that “workplace” traffic in the second quarter of 2020 fell by less in the countries applying the Zero Covid strategy (-14 % compared to -36 %).”

    4. “traffic in “cafés, restaurants, hotels, non-food businesses and leisure and cultural activities in general” was down by 14% in January and February 2021, compared to 2020, in the countries applying the Zero Covid strategy. This is a much smaller decline than in the countries applying a mitigation strategy (down 35%).”

    5. “In contrast, the course taken by the G10 countries … The mitigation strategy is causing them to seesaw, making it difficult to project into the future and thereby penalising societies and economies. This is especially problematic for businesses that depend on significant social interaction, which have been closed for months, as representatives of the hotel, restaurant, culture and recreation sectors have stated repeatedly.”

    They produced this Table (refer to Bill’s site) based on official OECD data (reproduced) which shows the numbers. It is hard to spin the numbers in any other way than to reach the conclusion the authors provide. Elimination works. Lockdown is required to eliminate the virus as well as other measures (contact tracing, social distancing, masks, etc) Elimination is better for health outcomes. It is better for economic outcomes. It is costly but less so than the alternative that most nations have deployed.” – Bill Mitchell.

    This outcome is just as Prof. John Quiggin predicted in early 2020. J.Q. was a firm advocate, from the outset, of locking down to effective community and national elimination. J.Q. nominated the economic principle involved and explained why it applied. I regret that I don’t recall the succinct title of that principle. I could go back and search for it or someone who can recall it, can post here.

    I also advocated on this site, from the outset, for a hard lock-down to effective community and national elimination. I would also have advocated for global elimination but that horse was permitted to bolt so early, it was clearly fruitless. For any person with basic scientific and economic literacy, the high probability that the lock-down strategy was correct, was in fact fully deducible. From the strong business sector push for staying open and pursuing (a very possibly mythical) herd immunity strategy, we can in turn deduce that the business / neoliberal community are not scientifically and economically literate (although financially literate). Either that, or they just don’t care at all about other human lives or the long-run future.

  6. It is not just the big strategic choice against elimination we messed up. We messed up every step of the way and keep doing so (we can be replaced with pretty much any western nation most of the time, mainly referring to Germany). We knew case numbers were exploding in October and did nothing. Then we did a little. After two weeks of doing a little, it was obvious to every layman eyeballing the chart that a little was not enough, but we still did only a little for a couple of month. Then we did a bit more, which helped for a while, just to learn it was not enough against the mutations pretty soon – again no reaction, up until today. This is an issue where politicians should have at least two weak head start over the broad public and still decisions to do the inevitable are only ever made weeks after public opinion favours them.

  7. James Wimberley @ 12 April, 9:06 PM: “The problem as always is that in real life there is no such thing as a Pareto improvement making everybody better off.”

    There is also no such thing in math econ theory as a Pareto improvement making everybody better off.

    A Pareto improvement refers to a state where at least one person can be made better off without making anybody else worse of by means of reallocating allocations. (Better or worse of is assessed in terms of individuals’ preferences.)

  8. Ernestine: That’s a trade quibble. If goods are infinitely divisible – and money is – a state where you can make one person better off is one where you can make everybody better off infinitesimally. More important, the political force of the concept does not come from the limited value of making just one person better off, but everybody or at least many. If goods are lumpy, maybe Pareto improvements are hard to find and the whole cute value-free scheme falls apart.

  9. James, if we had a Pareto chart, and if we are to “make everybody better off infinitesimally”, wouldn’t the x axis move toward infinity?

    I admit say 7bn “infinitesimally”-‘es adds up to ‘alot’. 1gm <Co2e x 7bn people. 1c x 7bn.

    How does one represent "infinitesimally" or 'alot' with a pareto chart diagam please?

    Any other appropriate analysis?

  10. Media $ spend on Climate Emergency insignificant, yet corporate media “gift[ing] Trump $5 billion in free air time”.

    Glad to see Covering Climate Now supporting media for better coverage of:-

    “We Are Living in a Climate Emergency, and We’re Going to Say So

    “It’s time to use a term that more than 13,000 scientists agree is needed

    By Mark Fischetti on April 12, 2021

    …” Every effort must be made to reduce emissions and increase removal of atmospheric carbon in order to restore the melting Arctic and end the deadly cycle of damage that the current climate is delivering.” Our article also noted that as of January, “1,859 jurisdictions in 33 countries have issuedclimate emergency declarations covering more than 820 million people.”

    “Journalism should reflect what science says: the climate emergency is here. The statement we have issued was coordinated by Covering Climate Now, a global journalism initiative with more than 400 media partners. Here it is:
    April 12, 2021

    “From Covering Climate Now, Scientific American, Columbia Journalism Review,the Nation, the Guardian, Noticias Telemundo, Al Jazeera, Asahi Shimbunand La Repubblica:

    “The planet is heating up way too fast. It’s time for journalism to recognize that the climate emergency is here.”…
    [Full response]

    Covering Climate Now founder article:
    “The media are complacent while the world burns

    “@GalJaya said, “Your ‘ratings killer’ argument against covering #climatechange is the reverse of that used during the 2016 primary when corporate media justified gifting Trump $5 billion in free air time because ‘it was good for ratings,’ with disastrous results for the nation.”

    “When @mikebaird17 urged Hayes to invite Katharine Hayhoe of Texas Tech University, one of the best climate-science communicators around, onto his show, she tweeted that “All In” had canceled on her twice—once when “I was literally in the studio w[ith] the earpiece in my ear”—and so she wouldn’t waste any more time on it.

    ““Wait, we did that?” Hayes tweeted back. “I’m very very sorry that happened.”

    “This spring Hayes redeemed himself, airing perhaps the best coverage on American television yet of the Green New Deal. “All In” devoted its entire March 29 broadcast to analyzing the congressional resolution, co-sponsored by Representative Alexandria Ocasio-Cortez (D-NY) and Senator Ed Markey (D-MA), which outlines a plan to mobilize the United States to stave off climate disaster and, in the process, create millions of green jobs. In a shrewd answer to the ratings challenge, Hayes booked Ocasio-Cortez, the most charismatic US politician of the moment, for the entire hour.

    “Yet at a time when civilization is accelerating toward disaster, climate silence continues to reign across the bulk of the US news media. Especially on television, where most Americans still get their news, the brutal demands of ratings and money work against adequate coverage of the biggest story of our time. “…

    Imagine newscorpse coverage if AoC spent $5bn advertising the Green New Deal.

  11. James Wimberley (and in support of Ernestine),

    My quibble would be that money is not goods. It’s what you exchange for goods. Money is very different from goods and services. Every good and every service presents a real aspect, or real aspects, essential to its nature. By “real aspect” I mean real materials and/or real energies essential to the good or service in providing something real to a human: be that real existent or process be say protein for muscle or music to the ear. Something maeterially real is provided ti humans, who are material beings. Even art and culture are tangible in the strict materialist sense. Think of musical instruments (physical) vibrations of strings (physical), sound waves (physical), vibrating ear-drum (physical) and finally detectable behaviors, and brain waves, (all physically detectable) from musical excitation.

    Modern money in its essential aspect has only a nominal or formal character. Its materially real characteristics are mutable. The physical medium of modern money (coin, paper, note, computer bits) is not important to the extent that the physical mediums of real products and services are. The differences are extensive and equate to a category difference. With money, it is not the physical medium but the pattern instantiated in the physical medium which carries the essential (nominal or formal) character of money.

    Why do I belabor this point? The reason I do so is that we need to clarify our thinking in relation to money versus goods and services .in order to not make what I term an ontological category mistake; to make the ontological aspect explicit. Many (perhaps all?) category mistakes are actually ontological category mistakes.

    “A category mistake, or category error, or categorical mistake, or mistake of category, is a semantic or ontological error in which things belonging to a particular category are presented as if they belong to a different category, or, alternatively, a property is ascribed to a thing that could not possibly have that property.” – Wikipedia.

    The problem with category mistakes is the assignment of a property to one or more objects or processes (which they don’t in reality possess) and then the use of that property in comparisons or other logical or mathematical operations. A category mistake facilitates the comparison of incommensurables (objects, processess, quantities or qualities) as if they were commensurables. This is the mistake at the heart of money (all money) and markets at least if money’s formal or nominal nature is not properly understood, acknowledged and worked around. That last is a big statement and grist for a big thesis (if my basic assumptions are valid): too big for me given my age and lack of post-grad education in philosophy, mathematics, economics, political economy, sociology and the hard sciences. I leave the potential details of that big thesis aside here (because I simply have not worked them out) to focus on one point.

    In the hard sciences, in some aspects of the soft sciences, and their applied disciplines, dimensional analysis is the analysis of the relationships between different physical quantities by identifying their base quantities (such as length, mass, time, and electric charge) and units of measure (such as miles vs. kilometres, or pounds vs. kilograms) and tracking these dimensions as calculations or comparisons are performed. The conversion of units from one dimensional unit to another is often easier within the metric or SI system than in others, due to the regular 10-base in all units. Dimensional analysis, or more specifically the factor-label method, also known as the unit-factor method, is a widely used technique for such conversions using the rules of algebra.” – Wikipedia.

    “Any physically meaningful equation, or inequality, must have the same dimensions on its left and right sides, a property known as dimensional homogeneity. Checking for dimensional homogeneity is a common application of dimensional analysis, serving as a plausibility check on derived equations and computations. It also serves as a guide and constraint in deriving equations that may describe a physical system in the absence of a more rigorous derivation.” – Wikipedia.

    A problem arises, if not in theoretical economics then in applied economics, finance and market transactions wherever money or financial capital are used to compare and value incommensurables like tons of wheat, loss of species, damage to climate and human lives. The equations, financial formulas and transactions used perforce equate incommensurables through the medium of money. We are so used to doing this that we do not notice the ontological absurdity in purist terms.

    At the same time, for pragmatic and seemingly practical and unavoidable reasons we do adopt this at least partially ontologically fallacious procedure (of valuing things in money) via relatively unrestricted market operations. It is ontologically fallacious in the pure terms of real dimensions. The money dimension is a social-fictive dimension not a real dimension. See the S.I. for the accepted list of real dimensions for scientific measurements, purposes and operations. Valuing things (objects and processes) in money is socially pragmatic and workable to a limited degree. It works to a limited degree in the social world with products and services which humans need. I say “limited” because we see many instances where it does not work. Here are three important cases.

    (A) We don’t accept valuation in money where it conflicts with socially acceptable moral philosophy or ethical values. For example, we do not legally permit the onwership, buying and selling of slaves, any more.

    (B) Money fails to manage negative externality issues properly even when attempts are made to create markets in “bads” as opposed to markets in goods. This requires further elucidation which I will attempt in the discussion below. Suffice to say here that, markets fail to coordinate the social world or human world properly with the natural world especially in terms of sustainability and nature’s intrinsic-value-to-itself.

    (C) Unregulated markets fail to equitably distribute goods and services leaving, as we see and as shown by Thomas Piketty, a growth in inequality when financial returns are greater than economic growth. This is only corrected, sometimes, (historically so far under capitalism during and after for some period, major periodical wars and crises which see the destruction of wealth in some manner(s) and the concomitant intensification of the struggle of workers and the gain access to a greater relative share of extant wealth be it dwindling or expanding.

    The most modern and sophisticated attempt to rescue or preserve economic value theory, that I am aware of, is rank-dependent expected utility. I haven’t found the literature which scientifically, ontologically and in moral philosophy terms supports the validity of engaging in the technical theory of RDEU. Perhaps someone can point me to this literature, if it exists. From my point of view, such value theory can only mainly measure the value of what humans need, want and like within the (mutable and manipulable) social transaction space and is very poor at measuring what humans truly need as necessities and essentials and OUGHT to like and want.

    This takes us to the Is–ought problem, or an extension of it. The “ought” is inescapable unless we want to abandon ethics and moral philosophy. The elites especially love abandoning ethics and moral philosophy in relation to effects on others, but not on themselves, and they do this as often and for as long as they can get away with it. The demographic majority now say “ought” very often and often enough with good and supportable reasons. We say we ought not have human slavery, for example or we ought not have rulers for life like King George or intending rules for life like Donald Trump.

    Market valuation is the all-purpose moral salve of neoliberal capitalism. If the venerated market values something or fails to value it, this is the handy default which negates the need for harder thinking, case by case thinking, environmental or whole of system thinking and for having real morals in relation to any number of things. But the particular problem with RDEU is the self-contained and self-reflexive nature of expected utility which in turn is code for “I want to get what I like and (usually) be damned to anyone else”. A special problem is that RDEU is elite-manipulable within a system where wealth gravitates to the top.

    BUT RDEU’s problems go deeper than that. Expected utility to humans ignores expected utility to much else of connected nature in the biosphere. Expected dis-utility to humans ignores expected dis-utility to much else of connected nature in the biosphere. Yet humans are embedded in connected nature and dependent on it. RDEU measured via the fictive money dimension cannot analyze or equate real problems in real dimensions. If it cannot analyze and equate it cannot commensurably value in the scientific sense and it cannot ethically value (even via consequentialism) in the moral sense. Only ethics backed by science can do this.

    First, we must decide our ethics. What do we truly value? Second, we must do the science, especially impact science as opposed to production science. Third, we most do allocation within the socioecomic sphere according to the limits of ethics and science. Allocation must be done only as informed by ethics and science. From each according to her/his ability, to each according to her/his need and all in accord with long term sustainability and the maintenance of maximum possible balanced complexity and diversity of nature on earth (humans are part of nature too.) Money ought play no role in valuing things globally but only a role in pricing available goods and services within a market whose bounds are already determined by ethics and science. This would be a great circumscribing of the operations of money with respect to current practice.

  12. We need to know about Lachlan, as Ikon says, who “especially love[s] abandoning ethics and moral philosophy in relation to effects on others, but not on themselves, “.

    Plus Crikey re “how the Murdochs control the news — and the news makers”.

    Plus ABC Fact Check “How large is Rupert Murdoch’s reach through News Corp in Australian media, old and new?” – soon to be defunded because, as K Rudd said “the influence of this very political media organisation is vastly greater on the Coalition than it is on the community at large”.

    “Lachlan Murdoch backs Tucker Carlson in ‘white replacement’ furore

    “Fox CEO defends unrepentant host after Anti-Defamation League calls for him to be fired for anti-immigration tirade

    “Dear Senate media diversity inquiry: here’s how the Murdochs control the news — and the news makers

    “With the Murdoch family’s wealth doubling in the last five years, their influence on media diversity — or lack thereof — has only grown.

    “For News Corp, it’s not personal — or not ALL personal, anyway. It’s business. It’s News Corp application of monopoly tactics to right-wing politics, seeking to control both the news and the politicians who make it, relying on its traditional mix of strong product design for market fit, a ruthlessly waged war against potential competitors and regulatory and political capture. ”

    ABC Fact Check…
    “How large is Rupert Murdoch’s reach through News Corp in Australian media, old and new?

    “For the purpose of this fact file, “reach” refers to the number of unique individuals who, for example, visited a website, watched a television channel or read a newspaper during a given period.

    “These definitions are a critical point on which Mr Rudd and News Corp differ, with Mr Miller telling the Senate inquiry that the Australian media “has never been more diverse”.

    “Indeed, the ACCC report found the internet had increased “the plurality of journalism available online” and this had “reduc[ed] the impact of the high concentration in the traditional print (now print/online) sector”.

    “Overall, the available evidence suggests that the entrance of digital natives has affected the sources of news that consumers access online,” the report said.

    “Mr Rudd, however, says this matters little if Mr Murdoch dominates in print.

    “At the inquiry, he claimed that each story published online or broadcast over the airwaves “finds its point of origin in a print story, often a Murdoch print story”.

    “Mr Turnbull also told the inquiry he thought that while print set the agenda less than it once did, this point was “largely correct”.

    “However, he noted, “the influence of this very political media organisation is vastly greater on the Coalition than it is on the community at large”.

    “In one submission, Sydney University Emeritus Professor Rodney Tiffen argued that News Corp’s power arose from the combined effect of its outlets, including those in television and radio, functioning as an “echo chamber” of opinions and themes. He also suggested this power had its “most direct effect” over politicians.

    “However, assessing the combined reach of these sources is not straightforward, as the available data typically offers only partial glimpses of the media landscape — generally adopting different measures for print, broadcast and digital media, and often treating online and offline audiences separately.”

  13. James, I can’t agree with your reply. Economists have laboured for a long time to introduce conceptual rigour. Without it, communication is difficult.
    1. It is not a trade quibble.
    2. Whether or not goods are divisible or lumpy does not affect the definition of Pareto Improvement.
    3. The definition of Pareto Improvement is not dependent on the existence of money.
    4. As I have indicated, what constitutes an improvement depends on individuals’ preferences. Hence ‘value free’ is meaningless.

    Regarding: “More important, the political force of the concept does not come from the limited value of making just one person better off, but everybody or at least many.”

    The concept of Pareto Improvement specifies “at least one individual is better of without making anybody else worse of.” It does not exclude that everybody is made better off. However it does not require that everybody is made better off.

    I am not sure what ‘political force’ means. Assuming it means politicians who are in government and want to remain in government and politicians who want to get into government, then they may target a winning majority of people at the next election. But a side effect of this thinking is that politicians do not aim to apply the notion of Pareto Improvement because they do not check who would be worse off.

  14. Ernestine – I can assure you that politicians are very keen to know who would be worse off (I’ve written Cabinet Submissions, and this is in the format). The calculation is about who, to what degree, and do they matter?

  15. Ernestine: If you want to stick to the canonical definition of a Pareto improvement as “at least one person better off and nobody worse off”, go ahead. I’ll claim then “Wimberley improvement ” for everybody better off, even trivially. On second thoughts. I won’t. Who wants to be immortalised for a piece of bad-faith trivia?

    Pareto Improvement A: Jeff Bezos is $10b better off, the 7.7 billion rest of us, exactly the same.
    (This is a stylized representation of recent economic trends in the USA).
    Wimberley improvement B: Jeff Bezos is $992,300,000 better off, the 7.7 billion rest of us better off bu 0.1c each.
    My conjecture is that if A is feasible, so is B. I only need $7.7 million of the pile to be divisible. (Iko: It doesn’t need to be money, sacks of rice and wheat will do. Bezos has to keep thegold toilet seats.) Ergo every feasible Pareto improvement is a Wimberley improvement.

    I can’t be bothered to try to prove this rubbish. To anybody sane, both A and B make the world worse, not better. The glaring increase in the bad of inequality is not remotely compensated by nugatory increases in the welfare of Mr. Bezos. What’s the point of a second megayacht, private jet, of ski lodge at Gstaad?

    Pareto can’t be blamed much for his adoption as a hero by Italian fascists. But his work marks a key step in the long evasive schuss of economics from classical utilitarianism, with its uncomfortably radical implications over inequality, to the ethical pseudo-neutrality of neoclassical microeconomics. See, we can define an economic utopia scientifically, without going into all that messy political stuff, which isn’t Serious because it’s all subjective “value judgements”. These “are not my department, says Wernher von Braun”. Horsefeathers.

  16. PS2: It should be $9,992,300,000 of course. $10bn and $1bn look very much the same to ordinary mortals.

  17. JQ, you are in good company with:- “* I use “well off” …”

    Just add “very” – ‘VWO’s’ as Dan Price does…

    “but not when it gets you from well-off to very well-off.”
    Dan Price

    “6 years ago today I raised my company’s min wage to $70k.

    “Fox News called me a socialist whose employees would be on bread lines.

    “Since then our revenue tripled, we’re a Harvard Business School case study & our employees had a 10x boom in homes bought.

    “Always invest in people.”
    “I made a lot of personal changes. But I still had savings and made a fair salary. I don’t miss anything about the millionaire lifestyle. Money buys happiness when it gets you out of poverty but not when it gets you from well-off to very well-off.”
    — Dan Price (@DanPriceSeattle) 
    April 13, 2021″

    “CEO Hits Back At Fox News After They Derided Him For Offering $70,000 Minimum Salaries

    “Dan Price of Gravity Payments said revenue has tripled since he cut his own annual salary of $1 million to $70,000.”

    “Price’s decision led to him being heavily criticized as a “socialist” on Fox News and Fox Business.”…

  18. I am not following this pareto argument, but I think I agree with James.

    It seems to me that there is very little political likelihood that the decarbonizing will be done in a manner such that no one is made financially worse off. (Even if that is possible.) Whether or not gas plant owners “deserve” compensation or not (and I might argue they do – what if they just bought it? what if …), they may get left holding the bag, financially. Here in the US they will still have a writeoff at least. Humans, at least the groups that I know, don’t generally behave all that rationally. We more sort of lurch around.

    James, is that what you were saying? (No one can tell, but I used to really like economics.)

    Mind you, I am still hoping for some geoengineering. I want my Holocene back, full stop.

    And anyhow, on your overall point, James – thank you! And from your lips to God’s ears, may it be so. There isn’t much good news lately.

    “MELBOURNE (Reuters) – S&P Dow Jones Indices said it is removing India’s Adani Ports and Special Economic Zone Ltd from its sustainability index due to the firm’s business ties with Myanmar’s military which is accused of human rights abuses after a coup this year.”
    “Market Forces Australian Centre for International Justice and Justice for Myanmar coordinated the case for review, presenting evidence of Adani Ports’ involvement with the Carmichael thermal coal project in Australia, its business links to the Myanmar military and ecological destruction at some of its port sites in India.”

  20. What are they smoking in Denmark?
    “The Danish Health Authority said that the availability of other vaccines combined with the pandemic being under control in the Scandinavian country at the moment meant the inoculation campaign could continue without the AstraZeneca shot.The Danish Health Authority said that the availability of other vaccines combined with the pandemic being under control in the Scandinavian country at the moment meant the inoculation campaign could continue without the AstraZeneca shot.”

    Both statements to justify the suspension are just obviously wrong, neither has Denmark the pandemic under control nor does Denmark have enough other vaccines:

  21. APRIL 15, 202: China must halve power sector emissions by 2030 to meet climate goals: study

    …Experts and campaigners have said that China should immediately halt all new coal plant approvals in order to meet climate goals.

    However, the country said in its 2021-2025 five-year plan published in March that it would continue to promote the “clean and efficient use of coal”.

    APRIL 15, 202: China gives green light to (5) nuclear units to cut carbon, sources say

    …“Nuclear power is a ‘have to do’ choice if China aims to achieve the targets of bringing carbon emission by 2030 and reaching carbon neutrality by 2060,” an official from the Nuclear Safety Bureau said.

    The five reactors approved include four regular nuclear units – number 7 and number 8 at Tianwan nuclear power plant in eastern Jiangsu province, and number 3 and number 4 in Xudapu in northeastern Liaoning province.

    All four will use Russian-made VVER-1200 technology and have individual capacity of 1.2 gigawatts (GW), two of the sources said.

    The government also approved a small, 125-MW module reactor (SMR) demonstration project at Changjiang nuclear power plant in Hainan province.

    In one of the country’s first experiments of small reactors aimed at better economics, CNNC will use its home-grown ACP100 technology.

    Construction of three of the five units, the SMR and one each from Tianwan and Xudapu, is expected to start later this year and is scheduled for completion in 2026, one official said.

    “They are moving ahead as earlier scheduled,” the official said, adding that means China has re-established its normal pace in advancing new projects.

  22. Climate Council Report


    “Key Findings…
    1. …Every fraction of a degree of avoided warming matters, and will be measured in lives, species and ecosystems lost or saved. We must do everything possible to deeply and rapidly cut our emissions, while also preparing for climate impacts that can no longer be avoided.

    2. (of 4, header) Our response must match the scale and urgency of this worsening situation. Action to deeply reduce emissions this decade will determine whether the climate system can or cannot be stabilised at warming of well below 2°C.”

  23. James, you don’t need to refer to Pareto Improvement (it is like a red herring in your argument; it rests on a misuse of the concept). If you wish to draw on contemporary economic theory to support
    a) reduction of wealth inequality
    b) urgent reduction of environmental degradation then I suggest referring to:

    a’) The minimum wealth constraint, defined as each (adult) member of a society has at least enough wealth to be able to buy at least a little bit of whatever is on offer in ‘the market’. Wealth may consist of a sufficiently high income from labour services. This concept is a crucial condition in theoretical models concerned with an economic system which many politicians say they want to have, namely a ‘market economy’, which offers people ‘freedom of choice’. (The same body of literature to which Pareto Improvement belongs.)

    b’) Incomplete markets. There is no ‘market’ for negative externalities such as ghg emissions (and the entire biosphere). ‘The market’ is incomplete. While an equilibrium (or several) can be shown to exist (under a long list of technically challenging conditions), the outcome or solution to this model – an equilibrium – is generically Pareto inefficient (ie, except for say a sunny Wednesday between now and the end of the world, the outcome is suboptimal). This result also belongs to the body of literature which you call “evasive schuss of economics from classical utilitarianism, with its uncomfortably radical implications over inequality, to the ethical pseudo-neutrality of neoclassical microeconomics” and which I call agency theory, following the methodology of general equilibrium theory post 1950 (mathematical economics).

    I don’t know or have even an opinion on whether or not neoclassical microeconomics can be held responsible for the growth in inequality. However, I am prepared to say that neoclassical economic textbooks I have come across do not state condition a’) although the condition is implicit in some diagrams (ie one can see it when one knows more than the diagram shows). However, the empirical observations on income and wealth inequality, within countries and across countries are such as to contradict a’) strongly and this is obvious not only to economists. Condition a’) seems to me to be quite consistent with people’s notion of economic fairness in so far as it excludes the extremes of either equal incomes and wealth or a concentration of wealth such that the society splits into ‘haves and have nots’. It recognises differences among people in terms of their abilities, opportunities (luck) and effort but the wealth distribution must be such that it facilitates an inclusive society.

    In my humble opinion, the growth of income and wealth inequality during the past 30 years or more – depending on which country or region one looks at – has its origins somewhere other than in post 1950 math econ. 19th century beliefs come to mind and the long shadow of the law, which in some countries goes back centuries. Furthermore, the habit of using the words ‘capitalism’ interchangeably with ‘market economics’ is part of the problem, IMO. We have capitalism – everything is counted in one numeraire (‘money’) or another. To the best of my knowledge, while we have a huge body of literature on ‘market economics’, we don’t have a theory of ‘capitalism’. What we have are books and articles that describe what is going on (eg Karl Marx, Thomas Piketty) and economists who try to move capitalism toward a more humane system where markets that work are kept and people like me who compare the description of capitalism with the theoretical models of economies and conclude there is no way capitalism can be squeezed into a ‘market economy’ where people are interested in food, housing, and stuff – physical stuff – and a sustainable environment because, in contrast to so-called ‘real economies’ (physical stuff and the biosphere), there is no limit to real numbers. Relying on paper money – a physical object – to put a limit on more and more ‘money’ is no longer sensible – one can always add a 0 to a computer entry – on Mr Bezos account if you like.

    I don’t know why in a democracy one needs to have an ‘economic argument’ at all if one does not like living in a society with excessive wealth concentration. I would not like to live in a society with even more beggars on the street and lots of people living in miserable conditions even if I would be offered two maids and a cook in addition to a high income. What is wrong in having preferences not only over types of yoghurt but also over at least some minimal social conditions.

    In short, I don’t have a bone with your sentiments or your objectives.

  24. Peter – how can one make a case for or against economics – as a discipline – when people can’t agree on the terminology or – in other instances – insist that only ideas from the 19th century are allowable or, yet again in other instances – present some arguments based on a special case?

    I carry on as I do because I don’t agree that post 1950s math economics is to blame for wealth concentration, environmental degradation and financial crises. The opposite is the case. This literature has been ignored, as far as I can tell.

  25. Ernstine – if they can’t agree on the terminology (after 200+ years), stick with wildly unrealistic premises, make basic category errors and persist in assigning quantities to the unquantifiable, then it’s either an interesting but irrelevant intellectual exercise or a smokescreen.

  26. Andreas Backhaus says of the great barrington declaration:

    1. What’s wrong with the “Great Barrington Declaration”? It’s lopsided, it’s downplaying risks, it rests on wrong assumptions, and it has already failed the test of reality. It’s a not-so-great declaration, if you will. Thread, with quotes from the declaration’s text:

    “12. Turns out @tylercowen and I had the same Sunday musings: “Why take this weird, hinky attitude toward the science for no good reason?”…”

  27. Peter – I try to do my bit to assist in distinguishing between those characterised by you and others.

  28. I find Ernestine one of the most interesting and thought provoking commenters here on economics. Ernestine in my opinion is “long” on the analytical and empirical axes and short on the ideological axis. Following John Ralston Saul’s philosophy,this makes E.G. long on the axes where it is good to be long and short on the axis where it is bad to be long. I flatter myself I am “long” on the analytical and empirical axes too, albeit on the first axis I am very idiosyncratic in my approach. But I fully admit I am also long on the ideological axis. I have both an emotional/visceral hatred of Laissez-faire capitalism and a strong mental ideological bias against it. This causes interesting tensions of thought (at least interesting to myself) and is the motor of much my autodidact investigation.

    The heterodox, but non-Marxist, economic community (taking Bill Mitchell, Steve Keen and the main RWER writers as somewhat representative) do blame post 1950s math economics, and its modelling, for all of modern economics’ ills. At the philosophical and logic end of the spectrum, Lars Syll is very representative of this kind of criticism. Ernestine has written enough to give me more than a hint that the heterodox attack on math econ might be somewhat of a straw-man attack. At the same time, the Friedmanites, Monetarists and Neoliberals, who have controlled the Western public economic debate from about the 1970s until now, do very much deserve all of the most savage attacks they receive from Mitchell, Keen, Syll et al.

    But honestly, the p[people who I believe understand the most about political economy (as opposed to “mere” economics are the Marxist Monthly Review writers like John Bellamy Foster and the “Capital as Power” theorists like Shimshon Bichler and Jonathan Nitzan. The Marxists and Bichler/Nitzan also disagree on certain points but that (partial) clash of views is very interesting and promising, I consider.

    My own approach has been to try to go back to “tin tacks”, meaning to empirically derived / empirically conditioned ontological fundamentals: meaning what really exists at base, how it exists and how it interrelates and interacts in a priority monist complex system sense. Of course, that makes me virtually a school of one. Nobody on the blogs (except Ernestine sometimes) really gets what I am saying about anything systems and ontology related. I do think complex systems and economic ontology theorists like Emeritus Professor John Foster, at U.Q. (School of Economics) would get what I am saying. Whether he thought my stuff was right, wrong, valid, trivial or plain ludicrous, he would have the concepts to properly judge what I was saying. But I’ve always shrunk from doing more than blogging. Sending unsolicited, amateur, autodidact treatises to a credentialed academic smacks far too much of being a crank.

  29. As far as I can tell (and I could easily be mistaken, as I haven’t bothered to investigate thoroughly), the dominant attitudes among professional economists are ones which I think mistaken. But even if I am right about this, ‘the dominant attitudes among professional economists’ and ‘the whole of economics’ are not synonyms, so ‘rejecting the dominant attitudes among professional economists’ and ‘rejecting the whole of economics’ are not synonymous. Although this is again something which I have not bothered myself to investigate thoroughly, my impression is that John Quiggin (for example) is coming up with sensible questions and sensible ways of investigating them (and I have bothered myself to purchase and read the whole of one of his books, Zombie Economics, so I do have some basis for this). If anybody think that what he is doing is not economics, I don’t know what else they would call it. Economists investigate what people do with money: that’s an important topic, deserving of investigation, and I don’t know what to call the subject if not economics. Rejecting the whole of economics because of the mistakes economists make is no more sensible than it would be to reject the whole of history because of the mistakes historians make.

  30. Back when I dropped out of an economics degree, we did have an econ101 course that went to great length emphasizing that one could starve in a Pareto optimum situation. There was even a little Marx in it and a full 2 hour a week environmental economics lecture. Unfortunately it was already a mess, the course became overloaded because they still taught the full standard US style 101 content and- most points were assigned to the standard maths part. Most students thus would not bother to attend the environmental economics lecture or read the Marx. You can guess which parts they cut from the course during the Bologna reform.

    Later, now in conservative Bavaria in a neither here nor there everything degree, the dumped down economics lecture was pretty much maths free, but otherwise 90% based on Manikew. The 10% self-made content was cheap communist eater rhetoric.

    Bottom line: Some economists are at least trying, albeit not necessarily succeeding to avoid the implicit bias in the standard course setup.

  31. Ernestine: You were quite right to call me out on one thing.In my too-sweeping condemnation g neoclassical microeconomics, I completely forgot about Pigou’s theory of externalities, dating from the 1920s. This is brilliant stuff: comprehensible, incisive, and technically productive.

    But why has it had so little impact on policy, when lesser developments on say auctions and derivatives have been adopted with more enthusiasm than prudence? Carbon pricing inches forward, true. But the great achievements of environmental policy-making, up to and including the Paris Protocol, owe little to the theory of externalities. They rely on a logic familiar to Hammurabi: identify a threat to the common good, and order those responsible to stop, under threat of the patient application of sharp objects. The secondary policy is to give tax money extracted from the peasantry with more sharp objects to wise men (and even women, a recent novelty) to come up with technical fixes.

    Another reason is that from the beginning, the theory of externalities has been treated as an interesting but minor technical problem, of the same order as say monopsony. IIRC Pigou’s original example is a householder who keeps rabbits that eat his neighbour’s vegetables, like Peter Rabbit Externalities are not treated as the catastrophic and fundamental contradiction of capitalism we now know them to be,.

  32. A proper Corona elimination Strategy and a cigarette ban, really want to move to New Zealand now:
    “New Zealand has announced a suite of proposals aimed at outlawing smoking for the next generation and moving the country closer to its goal of being smoke-free by 2025.

    The plans include the gradual increase of the legal smoking age, which could extend to a ban on the sale of cigarettes and tobacco products to anyone born after 2004, making smoking effectively illegal for that generation.”

  33. Hix,
    honestly a return to prohibition makes far more sense than a ban on cigarrettes. I bet with out doing a google search that xternalities of alcohol abuse far outweigh cigarette use.
    After the civil war takling the ills of unneccessary alcohol and mind altering drug use made perfect sense as the next big step in the improvement of the social and politcal behavior of the species. But the movement should have remained at the temperance level.

  34. In support of my generalisation: sometimes a discipline can involve great erudition and offer valuable insights but, at the same time, be built on erroneous assumptions. This will not matter if it has a central social role. Theology is a good example: two millennia of learning, some of the greatest minds in history, lots of sharp insights, the Christian version central to European thought until quite recently (and the Islamic version still a major force).

    Economics is somewhat similar, with its notions of ‘utility’ and its insistence on quantifying in monetary units the unquantifiable and non-monetary. It wants to find a gods-eye view of human affairs, only without a god and without openly confronting the full range of human concerns.

  35. The foundational ontological issue in economics (or rather political economy) is the issue of the interaction of the formal with the real, or to put it in standard economic parlance, the interaction of what can be prescribed (the prescriptive) with what can only be described (the objectively real). Superimposed on this issue are the issues of social power, the main modern forms being capital, violence and moral suasion in the form of ethics or moral philosophy.

    We have to examine our social ontology which is in whole or main part prescribed as legal laws, regulations, customs and precedents and extensively “programmed” (by enculturation and education) into humans as social agents by the methods of humanly developed formal systems utilizing language, logic, quantification, communication and behavioral control techniques. These are backed by physical punishment and reward systems of which we can see numerous examples in every facet of society. Next we have to examine how social ontology as a system relates to and interacts with objectively real material existence; the cosmos of stuff with objects, processes and fields which we can only describe and hopefully find fundamental hard science laws for (including of course the biosphere of stuff and other organisms, in which biosphere we find ourselves and live.)

    It is this interaction of the real with the formal and the formal with real in an iterative complex system manner which we need to study. These interactions occur for humans in a socioeconomy via and through the humans themselves as agents who are both external materials/energies/fields manipulators (via the body as servo and tools and machines as extensions) and also logical formal system manipulators (via the brain and computers as extensions for formal system brain-initiated actions). We need a comprehensive complex systems theory of these interactions. In other words, we need a theory of the interaction of social ontology with the ontology of the objectively real. It is only in discovering fundamental laws (if possible) or tendencies of this combined interaction arena, that we can move towards a science of the real-formal systems aspect of political economy. In its full aspect, political economy will always involve both power, as both ontologically physical power and ontologically social power, and “ethics” or moral philosophy (moral power as suasion). These further arenas of social power and moral philosophy do not seem at all amenable to scientising, at least not in toto, and there are plenty of warning signs that we should not attempt to scientise them. The outcomes of social darwinism and eugenics are two clear examples of those warning signs. The outcomes of propertarianism are another clear warning sign.

    This leaves the unification of the fundamental interactions of the formal and the real as the field that political economy ontology (and indeed all social sciences ontology) ought to attempt to enter and analyze; even develop from scratchif need be. How does the formal interact with the real? That is a very intriguing question. Pragmatically, we see it when human agents using formal systems employ these formal systems to deduce, plan or propose real actions to affect real systems. I will give a simple example. We use plans to build houses. At least, architects, designer,s builders and ambitious home handymen do. The house plan is a formalization based essentially on euclidean geometry and certain measures which we can find in the SI (International System of Units); particularly the meter and the kilogram but also other units and their derivatives if any formal engineering is required.

    My point here is that certain plans (prescriptions) can be translated into real constructions and certain plans cannot. The plans which can be translated into real constructions obey certain rules. In essential ways. The plans must be homomorphically congruent (following the correspondence theory of truth ) with real possibilities and only real possibilities which are inherent in objective, material reality. If the plans are not congruent in that essential way, then the planned structure cannot be built at all or will fail catastrophically immediately or eventually (as opposed to slow attrition or entropic failures which are both acceptable in realistic or pragmatic terms and inevitable in this cosmos).

    A key problem arises in economics (political economy) when prescriptive rules are adhered to ideologically rather than realistically. The key prescriptive rules of capitalism (unsustainable capitalism we might add as we are contemporaneously in the fraught process of discovering that this is the only kind of capitalism possible) center around the current prescriptions for property, markets and money-finance. These prescriptions “sum” to a formal system that has “formal emergent” qualities which eventually cause the real economy to approach the asymptote of the possible in the real world; and then both the real economy and the formal-financial economy break down. Such blindly ideological prescriptions assume that the impossible is possible and will and do take the real system to its asymptotic limits. I used the term “formal emergent” in scare quotes. This is because “formal emergent” is somewhat of an oxymoron. Something that is “formally emergent” in an axiomatic-prescriptive system (like that of capitalist property, markets and money-finance operations) is, strictly speaking, a theorem derivable from the prescriptive axioms which define the fundamentals of the system.

    However, difficulties in prediction arise from the limits not being near (initially) and the limits being in the real system, not in the formal system. When the real system (the finite biosphere) begins to show serious indications that endless growth in “value” and “wealth” in capitalism is not possible then the formal system and the real system will have diverged too far apart for the fictions (social-fictive quantities ike money and beliefs (faith in capitalism) to be maintained. Those are the points where we get economic crises, social crises, wars and now ecological and climate system crises. Thus, the deduction must be that a formal system which seeks to manage the real must be constructed to conform homomorphically and in emergent possibilities with the characteristics (particularly complexity and asymptotic limit characteristics) of the real system. It ought also conform to our ethical system(s) which in turn ought not (and cannot) fail to conform to the real either. However, diametrically opposite ethics may both conform to the real in many cases so ethics are not easily deduced from “is” arguments as opposed to “ought” arguments. For example, not stealing and stealing, are both to considerable extents possible in a real system plus a social system with a superimposed “don’t steal” rule.

    The method (in the social sciences and political economy) must be to subject all social and economic prescriptions (prescriptions being unavoidable for coordinated, cooperative, social and civilizational living) to two tests. The first is the physical reality test. The second is the ethical test (according variously to deontological and consequentualist ethics decided upon democratically). This is an argument essentially to abolish economic ideology if that goal could ever be attained or at least to demote such ideology to a minor place in our values and calculations.

    The physical reality test and even the social ontology ethical test are not and will not be simple. Evolution and emergence (in both physical reality and social reality) will continue to cause and ensure such difficulties. But surely we can avoid gross errors like ever-rising inequality and impending ecological catastrophe, if we act in time and it is not already too late.

    Our current problem is the high level of quasi-religious and ideological faith in capitalism as a system fit and able to endlessly deliver growth and goods and somehow save the environment at the same time , even if that be by geo-engineering. This faith will soon be shattered and the world will then be home to 7.9 billion very angry and dissatisfied people. The task now is to prepare the next system theoretically and in a manner which understands formal systems, real systems and their interactions in a fully scientific manner. The key will be to test every prescription both theoretically and in practice with a method (methodology) which applies formal prescriptions to real systems and tests whether the real system refutes the formal prescription. I have not developed this method even theoretically yet and I don’t know if I can. But in principle it can be done and it needs to be developed. The theoretical and empirical work of the Capital as Power theorists points the way in many respects. I approach the problem from a more philosophical and ontological angle. But CasP ontology is sound. I can’t find a problem with their ontology when I consider it philosophically and they have plenty of empirical evidence for the validity of their approach.

    I referred earlier to the need to consider power (especially as social power in general, suasion and violence, and capital as power in particular). If I wrote anything about capital as power here I would just be imperfectly paraphrasing the CasP theorists. I recommend people go to the source. Suffice it to say that the CasP theorists conclusively demonstrate that money does not measure value in any way and certainly cannot measure value in any real dimension. Capital instantiates power. This gets us back to the fact that political economy is about power. It is about forms of social power in the first instance. Sometimes, forms of social power must conform to the laws of real power in material reality. Other times they must conform merely to belief in socially shared fictions, like the fiction that money measures value. There are other forms of social power of course. Moral power (as moral suasion at least) is one form. But money, and capital, have as Marx predicted become very socially powerful and subsumed many other values under the cash nexus. This can’t last as it inevitably runs foul of the reality nexus i.e. the biosphere.

    That’s enough for a blog post today. This post really belongs in a Sandpit of course but I wanted to get it written and placed here at least.

  36. In support of my generalisation: sometimes a discipline can involve great erudition and offer valuable insights but, at the same time, be built on erroneous assumptions. This will not matter if it has a central social role. Theology is a good example: two millennia of learning, some of the greatest minds in history, lots of sharp insights, the Christian version central to European thought until quite recently (and the Islamic version still a major force).

    Economics is somewhat similar, with its notions of ‘utility’ and its insistence on quantifying in monetary units the unquantifiable and non-monetary. It wants to find a gods-eye view of human affairs, only without a god and without openly confronting the full range of human concerns.

    Economics and theology are not parallel cases in this way.

    The assumption that there is such a thing as God is erroneous; therefore, all statements about God are false.

    On the other hand, the assumption that there is such a thing as money is not erroneous, and so it is not the case that all statements about money are false.

  37. In an ideal world, alcohol use would also be strictly contained, However in terms of damage per user, cigarettes are decisively worse. Externalities are a bit tricky to measure. Based on the number of direct death of second parties, cigarettes are also worse. The distinction between self and second party damage is pretty arbitrary anyway in this context. Young people starting to smoke don’t usually start to smoke after reflected deliberation. Then they are addicted, which removes any resemblance of free will, if there ever was one.

  38. The tricky thing about cigarettes is that smokers largely function. They don’t have major behavioural issues as long as they get their fix. That is until they die a horrible death or get COPD. You don’t see homeless Chainsmokers. Rather the social worker that is trying to help the homeless alcoholic is sometimes one, just like his boss. That does not change that at the end much more people die.

  39. J-D – They are alike in that belief in God(s) is a real thing, as is belief in money. Not all theology is about god. It is true that not all statements about money are false, but economics is about more than money – and anyway lacks a coherent, reality-based understanding of what money is.

    I recommend this essay by Adam Tooze:

    At one point he notes Krugman’s exclamation that ‘Today, it’s all about the politics’. Well, duh, it was always all about the politics.

  40. That’s an interesting discussion by J-D and Peter Thompson. I will start with J-D’s main assertion and come back to other matters later.

    A. “The assumption that there is such a thing as God is erroneous; therefore, all statements about God are false.” – J-D.

    I would basically agree with a statement that “the assumption that there is such a thing as God is very likely erroneous”. My bias almost matches J-D’s. But I cannot be absolutely certain that God does not exist. Of course, “God” is a very large and vague concept. As a wise person once said to me, every person in every pew has a different picture of what the term “God” means. He could have added that every person not in a pew has a different picture also. To say “God” does NOT exist one also requires a picture or definition of what the term “God” means.

    I generally say the term “(Christian) God” means what the dominant theologies say it means these days. They are the gatekeepers of the official definitions after all. One is also free (in all non-theocratic states) to have an unofficial or idiosyncratic definition. If I believed in God in some way, I would likely say things like;

    (a) The Cosmos seems self-creating and capable of generating life and other surpsiing complexities from seemingly simple elements. Surely that is the power of a God in a sense. Thus, I could take the Cosmos as God for my purposes but I would recognize the futility of praying and supplicating to such a God and of expecting divine answers or guidance.

    (b) God, if IT existed, would not be limited to category consistency (as that would place a limit before omnipotence). Thus, “under” God things could, for example, be both real and illusory at the same time. There would no principle of sufficient reason (beyond God itself perhaps) and there would be no Law of Non-contradiction in total reality overall, although there is such a Law in human logic and in some aspects (at least) of empirical reality. As Karl Popper said, “Theories which explain everything explain nothing”.

    “There was neither non-existence nor existence then;
    Neither the realm of space, nor the sky which is beyond;
    What stirred? Where? In whose protection?

    Whether God’s will created it, or whether He was mute;
    Perhaps it formed itself, or perhaps it did not;
    Only He who is its overseer in highest heaven knows,
    Only He knows, or perhaps He does not know.”

    – “Nasadiya Sukta (after the incipit ná ásat, or “not the non-existent”), also known as the Hymn of Creation, is the 129th hymn of the 10th mandala of the Rigveda (10:129).” – Wikipedia.

    Hindu and Buddhist religious metaphysics are considerably more profound than Western Christian and Dualist metaphysics IMHO. Which does not mean I buy into reincarnation (for example). A metaphysics of priority or historical monism is more consistent with what modern science is beginning to show us about perceptible and discoverable reality: this is especially so in terms of the cosmos as a wholistic system of sub-systems with emergence and evolution as chracteristics. Again, all just my view. I do not know any deep or absolute truths nor, I opine, does any other human.

  41. J-D – They are alike in that belief in God(s) is a real thing, as is belief in money. Not all theology is about god. It is true that not all statements about money are false, but economics is about more than money – and anyway lacks a coherent, reality-based understanding of what money is.

    Because there is no such thing as God, there are no true statements about God. Because there is such a thing as religion, there are some true statements about religion. Because there is such a thing as money, there are some true statements about money, and some of those true statements about money are made by economists. If you look in books written by economists about economics, you will find some true statements about the subject matter. If you look in books written about religion, you will find some true statements about religion, but if you look in books written about God, you will find no true statements about God.

    I recommend this essay by Adam Tooze:

    I read it. It was interesting. Adam Tooze discussed mistakes that economists have made (no demonstration that economists make mistakes is required, since everybody makes mistakes), but he did not make a case that all of economics is a mistake.

  42. “Perhaps it formed itself, or perhaps it did not; … what modern science is beginning to show us about perceptible and discoverable reality”

    Perceptions of fundamental realities, economics, gods, truths. The apparent truth is that the world, even the turtles it sits on, even the sitting upon of turtles, like the encompassing cosmos are but contained simulations all the way down without a bottom in sight:

    “Theories which explain everything explain nothing” – philosopher of science, Karl Popper. Neither theology nor economics are branches of science. No matter the extent to which either may be false neither are falsifiable. More people believe theological explanations than those of economics. Economics is part of theology. Theology has no part in economics other than metaphor. ‘True’ statements about money are limited by formal mathematical proofs.

  43. J-D – you are engaging briskly with a straw man. I did not say that economists are always wrong, or never say useful or interesting things, or that all of economics is a mistake. My view is, rather, that economics as a discipline is founded on wrong assumptions and pursuing the unknowable or impossible (such as quantifying utility), and that this makes it, as a discipline, systematically flawed even as its often highly intelligent practitioners produce incidental nuggets of insight.

  44. My view is, rather, that economics as a discipline is founded on wrong assumptions …

    Disciplines aren’t founded on assumptions.

  45. To the extent that one can talk about a foundation of a discipline then I would say, at least with respect to Economics, it is the central question which provides the foundation as well as its boundaries.

    IMHO, the central question of Economics is how do humans survive materially (as understood by natural scientists rather than by accountants) as best as they can under alternative environmental and institutional conditions over space and time.

    The institutional condition of the Aboriginal society prior to 1788 is different to that of Adam Smith in Scotland around the same time, reflecting ultimately different philosophical ideas – “culture” may be the preferred word in some circumstances. But both societies had ‘an economy’, even though this word was not used at the time – to the best of my knowledge.

    The relationship between the natural environment and the institutional environment seems to me to be the crucial question in Ikonoclast’s writings.

  46. Ernestine,

    I agree. Of course, we can begin to tease out more questions and analyses from your definition of the central question. Moving in the macro and social direction takes us to questions about institutions and culture. Moving in the macro and environmental direction takes us to questions about the environment and biosphere. Moving in the micro directions takes us to other details about humans and the environment. I can’t get into detailed issues here in a short reply.

    Suffice it to say that institutions are the more formalized and ritualized aspects of culture with their influences running through much or all of any given culture. Technology also is a key part of culture. It too is a cultural production, an ongoing cultural production, and technology is how we influence the real with the formal and how we measure changes in the real in formal terms. This definition includes physical tools and machines but also includes well-developed formal tools. In my definition, language, mathematics and geometry (to name three “items”) are also technologies.

    What is of particular interest to me (and I think is the central ontological question of economics) is the basics of how the formal interacts with the materially real world and vice versa. It is at this juncture that a new complex systems philosophy (an ontology) and even a new complex systems science, if possible, needs to be developed.

    The need for this development (a new ontology for economics) has emerged floridly now from the clash of extant economic systems with material limits. Although this issue was also emerging from the failure of neoliberal capitalism, at least, to grapple with its own prescriptions (axioms) which produce greater inequality axiomatically. Piketty’s most famous (conditional) equation is really the best demonstration (and he has backed it with two centuries of empirical data at least IIRC from England and France).

    If r GT g then inequality increases.

    This illustrates that the system, as it stands, requires endless growth as the only engine of inequality reduction (other than major crises like depressions and wars which destroy wealth). Once we realize, as we do now, that endless growth is impossible, then we realize, or ought to, that our institutions, legal laws and regulations must change. The current debt, money, finance system (a formal system) predicated on and stipulating endless growth can no longer be applied. The biosphere will break down. You have said these things yourself and some of your insights have definitely influenced and re-directed my thinking.

    This gets back to the argument that formal prescriptions which take the real system to an asymptote limit (where it breaks down and likely collapses) must change. The formal systems must change to operate more in accord with the characteristics and limits of real systems.

    All of this has been said before in one way or another by perceptive economists, including yourself. However, the formalization of formal / real interactions at the ontological level (what exists at base, how it exists and how it interacts) has not to my knowledge been fully explored and developed out. It’s a hard concept to develop, let alone explain. I am writing a treatise that perforce commences with the necessity for considering the world (cosmos) as a single priority monist or historical monist system of sub-systems. This is the only way to resolve the seeming paradox of the formal affecting the real. The formal and the real are in the same monistic system. It solves the “transmission” problem of Cartesian duality. This might sound “arcane” or of merely metaphysical-speculative note. It is not.

    Getting an “ontology of objects” correct and getting how they interact correctly mapped is actually the most central part and parcel of every discipline, if that discipline is developed properly, whether that discipline be prescriptive or descriptive. With a (partial) computing background, I am at least basically aware of the crucial nature of ontology in the computer sciences. Indeed, if one looks up the term “ontology” these days one is likely to get more hits relating to the computer sciences than to philosophy. That actually illustrates how fundamentally ontology has crossed over from “mere” speculative and religious ontology into scientific and technical disciplines.

    The computer sciences illustrate (within programmed feed-back control circuitry) how the formal (including logic and logic gates) interacts with the real. There’s a deep connection which needs to be examined scientifically and ontologically. Specifically, capitalism (or simply our current system) lacks the feed-back controls to avoid taking real systems to asymptote limits. This is a crucial failure of the formal part of the economic system and its connections of the formal with the real in control and feed-back terms. Our debt, money, finance system, based on the current axioms (prescriptions) of private property and the tie-ing of formal representations of wealth to real “wealth” (for want of a better term) in prescribed equations was designed for an open, (seemingly) endless world and failed other tests too (like those of humanity and equality). The world is now closed. The current political economy is anachronistic, obsolete. Apparently, when the world changes, the last thing to change (not the first) is human minds. Sad that it should be so but that too is potentially explicable in my philosophy as the formal initially emerges out of the material in the priority or historical monist view.

    But that’s enough here. I have a tendency to write too much.

  47. To the extent that one can talk about a foundation of a discipline then I would say, at least with respect to Economics, it is the central question which provides the foundation as well as its boundaries.

    IMHO, the central question of Economics is how do humans survive materially (as understood by natural scientists rather than by accountants) as best as they can under alternative environmental and institutional conditions over space and time.

    If a discipline were founded on an assumption, it would be possible for the assumption to be false, with obvious implications for the discipline. But if a discipline is founded on a question, it’s not possible for the question to be false. There are lots of things a question can be, including vague, boring, or unimportant, but one thing it can’t be is false.

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